The North Sea Transition Authority (the “NSTA”), pursuant to the Energy Act 2008 (the “Act”) is the licensing authority for offshore gas storage and offshore gas unloading (including hydrogen). Pursuant to the Act, a licence issued by the NSTA is required for the following activities:
- the use of a controlled place for the unloading of gas to an installation or pipeline (subject to certain exceptions);
- the use of a controlled place for the storage of gas;
- the conversion of any natural feature in a controlled place for the purpose of storing gas;
- the recovery of gas stored in a controlled place;
- the exploration of a controlled place with a view to, or in connection with, the carrying on of activities above;
- the establishment or maintenance in a controlled place of an installation for the purposes of the activities above.
In this context, “gas” means any combustible substance which is gaseous at a temperature of 15° C and a pressure of 101.325 kPa (1013.25 mb) and which consists wholly or mainly of methane, ethane, propane, butane or hydrogen (or of a mixture of two or more of those substances).
“Controlled place” means a place in, under or over – (i) the territorial sea or (ii) waters in a Gas Importation and Storage Zone (within the meaning of section 1(5) of the Act).
If you wish to apply for a licence for any of the above activities, please contact the NSTA at firstname.lastname@example.org who will provide advice on a “case-by-case” basis on licence application requirements.
If a licence is granted for any of the above activities (except under (a)), the model clauses that will be incorporated into a licence can be found here: https://www.legislation.gov.uk/uksi/2009/2813/contents/made
As well as a licence for any of the above activities, a Crown lease issued by The Crown Estate (“TCE”) or Crown Estate Scotland (“CES”), as appropriate, is also required. If applying to the NSTA for a licence, you should contact TCE/CES (as appropriate) at the earliest opportunity.
You will also be required to submit supporting environmental information to the Offshore Petroleum Regulator for Environment and Decommissioning (“OPRED”) at the Department for Energy Security and Net Zero (“DESNZ”). To discuss requirements, OPRED can be contacted at email@example.com.
If a licence is granted, under the model clauses incorporated into the licence, the NSTA must approve the appointment of an operator. Approval relates only to an operator's competence and does not confer any permission to carry out activities such as drilling, seismic surveys, or gas/hydrogen unloading or storage developments. The approval is specific to the licence under which it is given, and each application is considered on its own merits.
Award of Gas Storage Licence – April 2023
On 5 April the North Sea Transition Authority (NSTA) offered a gas storage licence to dCarbonX Ltd for the Bains site in the East Irish Sea, east of the Morecambe Fields.
The award of the licence allows dCarbonX Ltd to progress with seeking the further regulatory approvals required before gas storage operations can commence, including further approvals from the NSTA.
Applications for Gas Storage Licences - June 2022
On 8 June 2022, the NSTA published notifications that it has received applications for Gas Storage Licences pursuant to Chapter 2 of the Energy Act 2008 (the ‘Act’) in the Southern North Sea of the United Kingdom Continental Shelf (‘UKCS’) and the East Irish Sea of the UKCS. The Southern North Sea Notification of Application can be viewed here and the East Irish Sea Notification of Application can be viewed here. Details in the notifications include the areas covered in the application.
The deadline for these Notices has now passed (5pm Wednesday 22 June). The NSTA will not consider any further applications for Gas Storage Licences for the areas, other than those notified to the NSTA prior to the deadline.
Award of Gas Storage Licence - July 2022
On 21 July 2022, the NSTA awarded a gas storage licence to Centrica offshore UK Ltd (COUK) for the Rough site off the East Coast of England in the Southern North Sea.
The award of a licence allows COUK to progress with seeking the further regulatory approvals required before gas storage operations can commence, including further approvals required from the NSTA.
The application was received on 8 June and, after no further applications for the area were received by the deadline of 22 June, the NSTA after conducting its review, has awarded the licence to COUK.